Final tri-agency regulations were released recently on the religious employer exemption from health care reform's contraception mandate, and there is little change from the approach outlined in the proposed regulations (see discussion here). In short, the regulations finalize a moderate expansion of the definition of "religious employer," but continue to require religiously affiliated nonprofit organizations to seek an "accommodation" that allows individuals covered under their plans to obtain contraception coverage at no cost through an insurance carrier.
Applicability Date. A key piece of the final regulations is the effective-date provision, which provides nonprofit organizations some additional time to comply with the accommodation requirement. The regulations generally apply for plan years beginning on or after January 1, 2014, rather than applying for plan years beginning on or after August 1, 2013, as previously expected. Nonprofit organizations that had been relying on a one-year safe harbor from application of the mandate (see description here and here) may continue relying on the safe harbor until the first plan year beginning on or after January 1, 2014. CMS has updated its guidance on the nonenforcement safe harbor (here).
Definition of Religious Employer. The definition of religious employer is unchanged from the proposed regulations. Although not intended to expand the number of organizations that qualify as religious employers, the change is intended to clarify that religious employers providing educational, charitable, and social services may qualify for the exemption even though some of their constituents or employees may not be of the same religious faith.
Eligible Organizations. Nonprofit organizations that object on religious grounds to providing some or all of the required contraception coverage but that do not qualify as "religious employers" may obtain an accommodation. The organization must self-certify that it meets the following qualifications for the accommodation:
- It opposes providing coverage for some or all of the required contraceptive services on account of religious objections.
- It is organized and operated as a nonprofit entity.
- It holds itself out as a religious organization.
The organization then provides its self-certification to the insurance carrier that provides coverage for the organization's group health plan (if the plan is fully insured) or to the third-party administrator (TPA) that administers the organization's group health plan (if the plan is self-insured). The insurance carrier or TPA is then required to arrange for individuals covered under the plan to receive the required contraceptive coverage at no cost to either the employer or the covered individuals.